Community 1st Bank (OTCBB: CFBN), with $230.0 million in assets, today reported net income of $1.1 million for the fourth quarter of 2014 and $1.5 million for the year ended December 31, 2014.
James J. Kim, President and CEO commented, “The fourth quarter results show strong balance sheet growth, resulting in continued growth in earnings which has been a key area of focus for the Bank. The strong core earnings results were augmented by the reversal of the remaining valuation allowance on our deferred tax asset.”
Total assets at December 31, 2014 were $230.0 million, representing an increase during the year of $18.5 million, or 8.7%, from $211.6 million at December 31, 2013. Community 1st Bank (“the Bank”) was successful in growing loans by $31.0 million, or 26.6%, from $116.4 million at December 31, 2013 to $147.4 million at December 31, 2014. Non-interest bearing deposits grew by $6.3 million, or 11.9%, from $52.7 million at December 31, 2013 to $59.0 million at December 31, 2014. Total deposits increased by $19.7 million, or 10.6%, from $186.3 million at December 31, 2013 to $206.1 million at December 31, 2014. When comparing the December 31, 2014 balances to the previous quarter ended September 30, 2014, total assets increased from $223.2 million at September 30, 2014, representing an increase of $6.8 million, or 3.1% and loans increased from $133.8 million at September 30, 2014, representing an increase of $13.6 million, or 10.2%. Total deposits increased by $5.8 million, or 2.9%, from $200.3 million at September 30, 2014 and non-interest bearing deposits decreased slightly from $60.3 million at September 30, 2014. The strong balance sheet growth during 2014 was the result of the commitment to excellence and customer relations demonstrated by the relationship managers and all other staff at Community 1st Bank.
Operating Results - Quarter
The Bank reported net income for the quarter ended December 31, 2014 of $1.1 million, which included an $819 thousand tax benefit related to the reversal of the remaining valuation allowance on deferred tax assets and gains on sales of securities totaling $23 thousand. This compares favorably to net income of $1.0 million for the same period in 2013, which included a $900 thousand tax benefit related to the partial reversal of the valuation allowance on deferred tax assets and gains on sales of securities of $30 thousand. Net income, excluding the impact of the aforementioned tax benefits and gains on sales of securities, was $212 thousand for the quarter ended December 31, 2014, representing an increase of $115 thousand, or 118.6%, from the $97 thousand that was earned during the quarter ended December 31, 2013.
Interest income totaled $2.1 million for the quarter ended December 31, 2014, representing an increase of $281 thousand, or 15.5%, when compared to the same period in 2013. The increase in interest income was driven by the growth in the loan portfolio, which more than offset the decrease in loan yields, as well as the decrease in interest income on investment securities. Interest expense totaled $216 thousand for the quarter ended December 31, 2014, representing an increase of $17 thousand, or 8.5%, when compared to the same period in 2013. Net interest income increased by $264 thousand, or 16.4%, for the fourth quarter of 2014 compared to the same period in 2013. The Bank shows continued improvement in its net interest margin as the Bank has been successful in improving its earning asset mix, replacing lower yielding securities with higher yielding loans.
Operating Results - Year
The Bank reported net income for the year ended December 31, 2014 of $1.5 million, which included an $819 thousand tax benefit related to the reversal of the remaining valuation allowance on deferred tax assets and gains on sales of securities of $26 thousand. This compares to net income of $1.9 million for the same period in 2013, which included a $900 thousand tax benefit related to the partial reversal of the valuation allowance on deferred tax assets and gains on sales of securities of $604 thousand. Net income, excluding the impact of tax benefits and gains on sales of securities, was $642 thousand for the year ended December 31, 2014, representing an increase of $280 thousand, or 77.3%, from the $362 thousand earned for the year ended December 31, 2013.
Interest income totaled $7.7 million for the year ended December 31, 2014, representing an increase of $644 thousand, or 9.1%, when compared to the same period in 2013. Interest expense totaled $891 thousand for the year ended December 31, 2014, representing an increase of $63 thousand, or 7.6%, when compared to the same period in 2013. Net interest income increased by $581 thousand, or 9.3%, for the year ended December 31, 2014 compared to the same period in 2013. Non-interest expense increased by $445 thousand, or 7.5%, to total $6.4 million for the year ended December 31, 2014 compared to the same period in 2013. The increase in non-interest expense was primarily driven by increases to our business development team, which has contributed to improving the earning asset mix by replacing lower yielding securities with higher yielding loans, driving the growth in interest income.
Credit Quality
The allowance for loan losses at December 31, 2014 was $2.6 million, or 1.8% of gross loans, compared to $2.7 million, or 2.3% of gross loans at December 31, 2013. There were no loan charge-offs and recoveries totaled $1 thousand for the quarter ended December 31, 2014, compared to loan charge-offs of $61 thousand with recoveries of $450 thousand for the same period in 2013. Loan charge-offs for the year ended December 31, 2014 were $534 thousand with recoveries of $43 thousand, compared to loan charge-offs of $180 thousand with recoveries of $471 thousand for the same period in 2013. Nonperforming loans at December 31, 2014 were $3.9 million, or 1.7% of total assets, representing an increase of $2.4 million, or 155.2%, from December 31, 2013. The increase in loan charge-offs and nonperforming loans was due to one relationship which the Bank is currently in the process of resolving. Nonperforming loans at December 31, 2014 decreased by $242 thousand, or 5.9%, from $4.1 million at September 30, 2014.
Capital
The Bank continues to maintain a strong capital position with a Tier 1 Leverage ratio of 10.0%, Tier 1 Risk-based Capital ratio of 13.2% and Total Risk-based Capital ratio of 14.4% at December 31, 2014. At December 31, 2013 the Tier 1 Leverage ratio was 9.4%, the Tier 1 Risk-based Capital ratio was 14.0% and the Total Risk-based Capital ratio was 15.3%. The Bank’s capital is in excess of that required to be considered “well-capitalized” by regulatory standards.
James J. Kim, President and Chief Executive Officer, commented, “Community 1st Bank continues to improve core earnings by strengthening its balance sheet. The great year is a direct result of the effort and sacrifice of the great banking team at Community 1st Bank, the unwavering support of our shareholder base and our loyal clients.”
Community 1st Bank is headquartered in Auburn, California, with branches in Roseville and Auburn and a loan production office in Sacramento, California. Community 1st Bank offers a wide range of business and consumer deposit products including remote deposit capture, health savings accounts, online banking, mobile banking and cash management services. The Bank also offers a full complement of loan products, including commercial, consumer, and real estate loans. For more information about the Bank, visit the Bank’s website at www.community1bank.com.
Forward-Looking Statements
Statements concerning future performance, developments or events, expectations for growth and income forecasts, and any other guidance on future periods, constitute forward-looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, loan production, competitive pressure in the banking industry, balance sheet management, net interest margin variations, the ability to control costs and expenses, changes in the interest rate environment and financial policies of the United States government and general economic conditions. The Bank disclaims any obligation to update any such factors.
| COMMUNITY 1ST BANK | ||||||
| BALANCE SHEETS | ||||||
| December 31, 2014 | December 31, 2013 | |||||
| (Unaudited) | ||||||
| ASSETS | ||||||
| Cash and cash equivalents | $ | 12,563,000 | $ | 4,719,000 | ||
| Federal funds sold | 152,000 | - | ||||
| Available-for-sale investment securities, at fair value | 59,710,000 | 80,665,000 | ||||
| Loans, less allowance for loan losses of $2,599,000 at | ||||||
| December 31, 2014 and $2,710,000 at December 31, 2013 | 144,756,000 | 113,679,000 | ||||
| Bank premises and equipment, net | 1,459,000 | 1,559,000 | ||||
| Interest receivable | 624,000 | 606,000 | ||||
| Other real estate owned | 783,000 | 870,000 | ||||
| Federal Home Loan Bank stock and other securities | 1,576,000 | 1,555,000 | ||||
| Bank-owned life insurance policies | 4,834,000 | 4,675,000 | ||||
| Other assets | 3,568,000 | 3,229,000 | ||||
| Total assets | $ | 230,025,000 | $ | 211,557,000 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Deposits: | ||||||
| Non-interest bearing | $ | 58,995,000 | $ | 52,727,000 | ||
| Interest bearing | 147,055,000 | 133,575,000 | ||||
Total deposits | 206,050,000 | 186,302,000 | ||||
| Borrowings | - | 3,365,000 | ||||
| Interest payable and other liabilities | 551,000 | 605,000 | ||||
| Total liabilities | 206,601,000 | 190,272,000 | ||||
| Shareholders' equity | 23,424,000 | 21,285,000 | ||||
| Total liabilities and shareholders' equity | $ | 230,025,000 | $ | 211,557,000 | ||
| COMMUNITY 1ST BANK | ||||||||
| STATEMENTS OF INCOME DATA (Unaudited) | ||||||||
| For the Three Months Ended December 31, 2014 and 2013 | ||||||||
| 2014 | 2013 | |||||||
| Interest income: | ||||||||
| Interest and fees on loans | $ | 1,755,000 | $ | 1,436,000 | ||||
| Interest on investment securities and interest- | ||||||||
| bearing deposits in other financial institutions | 340,000 | 378,000 | ||||||
| Total interest income | 2,095,000 | 1,814,000 | ||||||
| Interest expense: | ||||||||
| Deposits | 216,000 | 197,000 | ||||||
| Borrowings | - | 2,000 | ||||||
| Total interest expense | 216,000 | 199,000 | ||||||
| Net interest income | 1,879,000 | 1,615,000 | ||||||
| Provision for loan losses | 200,000 | 45,000 | ||||||
| Net interest income after provision for loan losses | 1,679,000 | 1,570,000 | ||||||
| Non-interest income: | ||||||||
| Service charges and fees | 13,000 | 17,000 | ||||||
| Gain on sales of available-for-sale investment securities | 23,000 | 30,000 | ||||||
| Gain on sales of loans | 25,000 | - | ||||||
| Other | 108,000 | 101,000 | ||||||
| Total non-interest income | 169,000 | 148,000 | ||||||
| Non-interest expense: | ||||||||
| Salaries and employee benefits | 836,000 | 861,000 | ||||||
| Occupancy and equipment | 141,000 | 156,000 | ||||||
| Other | 636,000 | 574,000 | ||||||
| Total non-interest expense | 1,613,000 | 1,591,000 | ||||||
| Net income before benefit for income taxes | 235,000 | 127,000 | ||||||
| Benefit for income taxes | (819,000 | ) | (900,000 | ) | ||||
| Net income | $ | 1,054,000 | $ | 1,027,000 | ||||
| Net income | $ | 1,054,000 | $ | 1,027,000 | ||||
| Preferred stock dividends and accretion of discount | 35,000 | 35,000 | ||||||
| Net income available to common shareholders | $ | 1,019,000 | $ | 992,000 | ||||
| Common Share Data | ||||||||
| Basic earnings per share | $ | 0.19 | $ | 0.18 | ||||
| Diluted earnings per share | $ | 0.16 | $ | 0.16 | ||||
| Weighted average shares outstanding | 5,494,937 | 5,449,242 | ||||||
| Weighted average shares outstanding - diluted | 6,515,150 | 6,470,567 | ||||||
| COMMUNITY 1ST BANK | ||||||||
| STATEMENT OF INCOME DATA (Unaudited) | ||||||||
| For the Years Ended December 31, 2014 and 2013 | ||||||||
| 2014 | 2013 | |||||||
| Interest income: | ||||||||
| Interest and fees on loans | $ | 6,394,000 | $ | 5,272,000 | ||||
| Interest on investment securities and interest- | ||||||||
| bearing deposits in other financial institutions | 1,308,000 | 1,786,000 | ||||||
| Total interest income | 7,702,000 | 7,058,000 | ||||||
| Interest expense: | ||||||||
| Deposits | 890,000 | 822,000 | ||||||
| Borrowings | 1,000 | 6,000 | ||||||
| Total interest expense | 891,000 | 828,000 | ||||||
| Net interest income | 6,811,000 | 6,230,000 | ||||||
| Provision for loan losses | 380,000 | 355,000 | ||||||
| Net interest income after provision for loan losses | 6,431,000 | 5,875,000 | ||||||
| Non-interest income: | ||||||||
| Service charges and fees | 58,000 | 66,000 | ||||||
| Gain on sales of available-for-sale investment securities | 26,000 | 604,000 | ||||||
| Gain on sales of loans | 157,000 | - | ||||||
| Other | 412,000 | 392,000 | ||||||
| Total non-interest income | 653,000 | 1,062,000 | ||||||
| Non-interest expense: | ||||||||
| Salaries and employee benefits | 3,427,000 | 3,135,000 | ||||||
| Occupancy and equipment | 565,000 | 607,000 | ||||||
| Other | 2,424,000 | 2,229,000 | ||||||
| Total non-interest expense | 6,416,000 | 5,971,000 | ||||||
| Net income before benefit for income taxes | 668,000 | 966,000 | ||||||
| Benefit for income taxes | (819,000 | ) | (900,000 | ) | ||||
| Net income | $ | 1,487,000 | $ | 1,866,000 | ||||
| Net income | $ | 1,487,000 | $ | 1,866,000 | ||||
| Preferred stock dividends and accretion of discount | 140,000 | 138,000 | ||||||
| Net income available to common shareholders | $ | 1,347,000 | $ | 1,728,000 | ||||
| Common Share Data | ||||||||
| Basic earnings per share | $ | 0.25 | $ | 0.32 | ||||
| Diluted earnings per share | $ | 0.21 | $ | 0.29 | ||||
| Weighted average shares outstanding | 5,466,769 | 5,449,242 | ||||||
| Weighted average shares outstanding - diluted | 6,487,680 | 6,469,512 | ||||||
